The enzymes that determine protein O-GlcNAcylation, O-GlcNAc transferase (OGT) and O-GlcNAcase (OGA), act on key transcriptional and epigenetic regulators, and both are abundantly expressed in the brain. However, little is known about how alterations in O-GlcNAc cycling affect human embryonic stem cell (hESC) neural differentiation. Here, we studied the effects of perturbing O-GlcNAcylation during neural induction of hESCs using the metabolic inhibitor of OGT, peracetylated 5-thio-N-acetylglucosamine (Ac4-5SGlcNAc). Treatment of hESCs with Ac4-5SGlcNAc during induction limited protein O-GlcNAcylation and also caused a dramatic decrease in global levels of UDP-GlcNAc. Concomitantly, a subpopulation of neural progenitor cells (NPCs) acquired an immature neuronal morphology and expressed early neuronal markers such as β-III tubulin (TUJ1) and microtubule associated protein 2 (MAP2), phenotypes that took longer to manifest in the absence of OGT inhibition. These data suggest that chemical inhibition of OGT and perturbation of protein O-GlcNAcylation accelerate the differentiation of hESCs along the neuronal lineage, thus providing further insight into the dynamic molecular mechanisms involved in neuronal development.